Initially founded in 1938 as Devkaran Nanjee Banking Company Ltd., by the family of Devkaran Nanjee, Dena Bank is currently a public sector banking institution. It was nationalized in 1969. At present, Dena Bank has over 1,739 Branches and more than 1,482 ATM’s across the country. Dena Bank Car Loans are offered to individuals and to Partnership firms, Proprietary Firms, Corporates, etc. for the purpose of financing the purchase of new cars or second-hand cars. Dena Vehicle Loan scheme offers a lower rate of interest for women.

Dena Bank Car Loan Interest Rates

Car loan EMI?can be easily calculated by a prospective borrower in order to understand its affordability and repayment schedule, even before applying for a loan. Car loan EMI can be calculated on the basis of factors such as desired loan amount, Interest rates, & loan tenure. The Dena Bank Car Loan scheme is the best scheme to finance the purchase of your dream car since it comes at incomparable interest rates and repayment options that are highly flexible. It also offers a lower-than-normal car loan interest rate for women.

How to Calculate Interest Rate on my Dena Bank Car Loan

With the flexibility of paying back your car loan in the form of Equated Monthly Installments(EMIs), customers can easily own a car without having to bear the brunt of a lumpsum expense. By paying nominal rates of interest for a tenure of your choice, you can get your dream car. When the loan tenure increases there would be an increase in the loan amount and a reduction in the rate of interest to be paid.

If you wish to know how EMI on your car loan is calculated, here is the basic formula that is applicable:

EMI (E) = [P x r x (1+r)^n]/[(1+r)^n-1]

Here,

P stands for the principal or the loan quantum,

R is the rate of interest applicable per month [ Therefore, for an annual interest rate of 10.20%, the rate of interest will be 10.20/(12 x 100)],

N is the number of monthly installments made/ no. of months taken for car loan repayment.

For example: If you take a car loan for Rs.2 lakh at an interest rate of 10.20% with a loan tenure of three years, an estimate of the total interest payable would be Rs.33,000, and the total payment made by you at the end of the tenure will amount up to Rs.2,33,000.

In the following illustration, for a car loan amount of Rs.4 lakh to be repaid in 2 years at an interest rate of 10.20% from Dena Bank (Calculations based on EMIs paid in advance), the EMI per month from March 2019:

EMI

Principal

Interest Amount

Total Payment

Balance Due

March 2019

Rs.15,095

Rs.3,400

Rs.18,495

Rs.3,84,905

April 2019

Rs.15,223

Rs.3,272

Rs. 18,495

Rs.3,69,682

May 2019

Rs.15,353

Rs.3,142

Rs.18,495

Rs.3,54,329

EMI and repayment per year for 2 years (starting from March 2019 – February 2021):

Year

Principal

Interest Amount

Total Payment

Balance Due

2019

Rs.1,56,855

Rs.28,093

Rs.1,84,948

Rs.2,43,144

2020

Rs.2,06,621

Rs.15,319

Rs.2,21,940

Rs.36,523

2021

Rs.36,523

Rs.466

Rs.36,989

Rs. 0

Total interest amount to be paid for a Dena Bank Car Loan amount of Rs.4 lakh for 2 years at 10.20% interest would be Rs.43,878. Therefore, the total payment made by the end of the tenure if EMI is paid in arrears is Rs.4,43,878. The interest rate decreases until the loan is repaid and the principal loan amount repayment increases with the tenure.

Factors affecting Dena Bank Car Loan Interest Rates

There are several factors that can affect the loan amount offered to a borrower by Dena Bank, and also the amount of interest that is to be paid per month. These in turn determines the EMI to be paid out by the borrower. Some of these factors have been described below.

Loan Tenure - If the tenure you have chosen for your car loan is longer, it indicates higher risk of default payments to the bank. To negate this risk the bank might increase the interest rate applicable on the loan. By going for a lower loan tenure, the bank will be assured of quicker repayment so you can expect a lower interest rate.

Guarantee - Along with the applicant, the spouse / or may other individual who is fulfilling the eligibility criteria under the Scheme is to stand as co-borrower. If together they have a substantial income that backs their creditworthiness, the applicant can get the car loan approved. In this case, the borrower can bargain for a lower car loan interest rate.

CIBIL Scores - An individual’s credit history is reflected in his/her credit score. CIBIL score is one of the most popular credit rating measures undertaken by banks. This score is generated based on the Credit Information Report. If a borrower’s CIBIL score is high, he/she is considered more creditworthy and legitimate and thereby, the chances of getting the car loan approved is very high. This will also influence the bank to lower the rate of interest that is applicable on the loan quantum of your choice.

Income- Applicants with higher income are more creditworthy since they have a higher repayment capacity. If this is the case then you can negotiate with the Bank for a lower rate of interest.

Down payment - The percentage of loan margin or down payment that is paid by the borrower out of his own savings also has an ancillary influence on the borrower's car loan interest rate. This is inversely proportional since the higher the down payment the lower is your interest rate on the car loan.

How CIBIL Score Affects Dena Bank Car Loan Interest Rates

The CIBIL TransUnion Score is a 3 digit number which ranges from 300 up to 900 and this score reflects an individual's credit history. This is used by banks to evaluate whether the applicant is eligible for a loan, what his/her repayment capacity is, etc. A good CIBIL Score ensures that the applicant will get a positive response from the Bank for his/her auto loan application and also empowers the applicant to be in a position of power while negotiating for a lower rate of interest. Most lenders conduct this initial check while processing the borrower’s creditworthiness for the loan. High CIBIL score indicates greater probability of procuring?car loans?at an attractive interest rate. Those with higher CIBIL scores are also seen as a lower risk category and hence can avail loans more easily as compared to those with low CIBIL scores.

Key Points to Note About Dena Bank Car Loan Interest Rates

No prepayment charges

Repayment can be made in up to 84 EMIs (For new vehicles)

Bank charges interest on daily reducing balance

Bank disburses the loan amount directly to the authorized distributor from whom the vehicle has been purchased.

15% Loan Margin

Income Eligibility For a new Four-Wheeler:

Minimum annual income of Rs.2.50 lakh for Individual/Proprietary Firm

Minimum annual income of Rs.3 lakh for Partnership Firm / Company

GST of 18% is applicable on all banking products and services from the 1st of July, 2017.

GST of 18% is applicable on all banking products and services from the 1st of July, 2017.

Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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